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Small Employer's Health Plan Compliance Checklist for the previous hitAffordable Care Act next hit



The Affordable Care Act , Pub. L. No. 111-148, as amended, introduced numerous additional substantive and procedural requirements for group health plans and employers sponsoring those plans. The compliance checklist is intended for employers with fewer than 50 employees in communications with a health insurance issuer providing coverage for their employees. It lists significant factors involved in compliance with the Affordable Care Act .


Grandfathered Plans:

• Review the plan to ensure that it has not done anything to lose grandfathered status.

• Review the plan to make sure that it has been amended to comply with the health care reforms to which it is subject (i.e., beginning in 2014, the plan cannot have any preexisting condition exclusions and cannot apply a waiting period of more than 90 days). See below for a list of health insurance reforms.

• Check that a Notice of Grandfathered Health Plan Status is included in any plan materials describing the benefits provided under the plan, including the summary plan description (SPD).


Group Market Reforms:

• Review the plan to verify that modifications necessary to comply with the group market reforms (generally effective for plan years beginning on or after September 23, 2010) were incorporated.

• Evaluate administrative procedures to make sure that plan is complying with requirements.

• Remove any restricted annual limits on essential health benefits (EHBs) for plan years beginning on or after January 1, 2014. Thus, no mini-med plans covering EHBs may be offered.

• If the plan was granted a waiver on restricted annual limits, it had to resubmit by December 31, 2013, the information provided to obtain the waiver.


Health Insurance Market Reforms:

• Review the plan to verify that changes needed to comply with insurance market reforms are incorporated, generally effective for plan years beginning on or after January 1, 2014. These include:

□ no waiting period greater than 90 days;

□ no preexisting condition exclusions for adults or covered children under age 26;

□ any annual cost-sharing imposed cannot exceed previous hitAffordable Care Act next hit imposed limitations (e.g., for the 2014 plan year, out-of-pocket maximums of $6,350 for self-only coverage and $12,700 for other coverage; for the 2015 plan year, maximums of $6,600 and $13,200, respectively), except that relief from the out-of-pocket limitation is available for the 2014 plan year to certain employer-sponsored plans that utilize multiple service providers to administer affected benefits;

□ for fully-insured plans, cover “essential health benefits”;

□ coverage for specified clinical trials;

□ no discrimination based on health status-related factors, including compliance with wellness program rules; and

□ no provider discrimination.

• Align the plan document, SPD, and administrative procedures.


Notices and Disclosures:

• Verify that procedures are in place to provide the appropriate patient protection disclosures (e.g., access to health care professionals, coverage of emergency services) whenever the plan provides a participant with an SPD or other similar description of plan benefits.

• Check that the Summary of Benefits and Coverage (SBC) was timely sent to participants and beneficiaries and make sure that procedures are in place to deliver the SBC upon request and in particular situations (such as special enrollment).

• The SBC template used for 2014 and for 2015 differs from the previous template. Confirm that the appropriate SBC template is being used. See

• For the requirement to provide 60-days advance notice of any material modification in any plan terms, review procedures for determining whether changes are material modifications and for providing notice.

• Review procedures for providing notices related to the claims appeals processes.

• Ensure procedures are in place to provide a Notice of Health Insurance Marketplace Options to new employees within 14 days of their start date.

• Verify that Form W-2 informational reporting of employer-sponsored health coverage reflects any changes made to health plans offered.

• If a wellness program is offered, make certain that required notices are provided.

• If employer is a religious organization that claims an accommodation regarding contraceptive services coverage, the issuer or third-party administrator provides notice to plan participants and beneficiaries of the availability of separate contraceptive coverage. However, the employer must ensure that accommodations requirements are satisfied, which includes making the self-certification available for examination upon request by the first day of the plan year.


Health Care Coverage Options:

• The employer may offer employees the opportunity to obtain coverage in a Small Business Health Options Program (SHOP) Exchange through its cafeteria plan. Rolling enrollment applies, so consider whether to begin offering coverage through the SHOP instead of sponsoring a group health plan or offering no coverage.


Tax Considerations:

• If the employer meets size and salary criteria to be eligible for the small business health care tax credit (i.e., fewer than 25 full-time equivalent employees with average annual wages under $50,800 for 2014 (under $51,600 for 2015)), consider whether coverage should be offered through the SHOP Exchange so the employer can claim the tax credit for premium contributions.

• Monitor employer growth, including employers that are combined under the controlled group rules. Employers with 50 or more full-time equivalent employees in the preceding year will be subject to the employer shared responsibility penalty (for months beginning in 2015, or for months beginning in 2016 if they have fewer than 100 such employees and meet conditions related to workforce, employee hours and previously offered coverage) if they do not offer coverage that is minimum essential coverage or they offer coverage that is not affordable or does not provide minimum value.


Non-Calendar Year Plans:

• Amend cafeteria plan for transition relief regarding salary reduction elections without a change-in-status event and for changes to flexible spending account rules.



• Transitional reinsurance fees for 2014 are due in 2015, and enrollment data is due to the Department of Health and Human Services by December 5, 2014 (extended from November 15, 2014). The issuer pays the fee for insured plans.

• Patient-Centered Outcomes Research Institute (PCORI) fees are due by July 31 of the year following the end of the plan or policy year. When the temporary fee is imposed on certain self-insured health plans, such as health FSAs and HRAs that are not excepted benefits, it is paid by the plan sponsor. When it applies to health insurance policies, it is paid by the issuer. Any payment due for the first year should have been made by July 31, 2013. If the employer owed any fee, ensure that the filing was made and that no amended form is required to make corrections.



• In addition to reviewing for compliance with the previous hitAffordable Care Act next hit, continue to review practices and procedures for furnishing health plan-related notices, including special enrollment rights under HIPAA, the annual Women's Health and Cancer Rights Act Notice and Medicare Part D notices. Verify that the COBRA election notice being provided (and required unless the employer does not meet the 20-employee threshold for federal COBRA to apply) is the version updated in 2013 to mention that alternatives may be available through the Health Insurance Marketplace.

• Review HIPAA/HITECH practices and procedures, including business associate agreements and privacy notices, for compliance with 2013 regulatory requirements.

• Examine spousal coverage following United States v. Windsor:

□ Review plan to determine whether it must be amended to ensure the same treatment of opposite-sex and same-sex spouses for federal tax purposes.

□ Determine whether procedures must be modified to stop imputing income to same-sex spouses.

□ If state tax treatment differs, make sure that procedures are in place to comply with both state and federal law.



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